Dominique Stender A blog about my thoughts and experiences in Information Technology

Scrum and fixed price contracts

I'd like to draw your attention to a discussion that was in the Scrum Development group on Yahoo titled Scrum and fixed price contracts.

Go and read the thread for quite a few interesting points. In a nutshell though, the question was how Scrum can help in fixed price contracts. I think that's an interesting question since at first sight a fixed price environment - and hence a fixed time environment - is contradictory to the agility that Scrum offers in terms of rescheduling tasks that have not begun yet, replacing items with others etc.

The consensus in the Yahoo group seems to be that fixed price contracts generally are a bad idea, will fail and that Scrum will not help you with that other than in damage control.

Well, in part I agree to that. Fixed price environments are tricky. Maybe they come into place because the client does not trust the agency, maybe it is a new relationship. Maybe they come to be because the sales staff of the agency gives the wrong impression in the first talks and no one dares to tell the inconvenient truth to the client after that, before the contract is written.

Maybe it is just how it always has been and we've all grown used to the process and the suffering involved?

I agree that some clients are politically important, door openers, key players. Whatever you call them, you will want a contract with them. Not for the sake of that contract but because of the things you believe you can get after that first contract runs well. And yes, in that situation it might not be very important to make profit on the initial contract.

But let's muse a bit on that thought. What good is a disappointed door opener client?